Shut Down Fermi 2 and Abandon Plans for Fermi 3

Detroit Edison is applying for a 20-year extension on their license to operate the Fermi 2 nuclear reactor, located near Monroe, Michigan, on the shore of Lake Erie. They are also deep in the process for getting permission to build a new, bigger reactor (Fermi 3) adjacent to Fermi 2. We need to decide if either project is a good idea.

In 2006, the Michigan Public Service Commission (MPSC) published a study called “Michigan’s 21st Century Electric Plan.” In it, their essential conclusion is, “Michigan’s total electric generation requirements are expected to grow at an annual average rate of 1.3 percent from 2006 to 2025 – from 112,183 gigawatt hours (GWh) to 143,094 GWh.”

GWh is the abbreviation for GigaWatt-hours, a reasonable unit for measuring the amount of electrical power consumed each year in Michigan. 100,000 GWH is equal to 100 million megawatt-hours, or 100 billion of the more familiar (to those of us who pay household electrical bills) kilowatt-hours.

The MPSC forecast is the basis for everything else in the report. It is the forecast Detroit Edison (DTE) accepted and used as the reason they thought Fermi 3’s generating capacity of roughly 11,000 GWh per year could be justified. In other words, DTE said this new nuclear power plant would be needed to supply some 7.7% of Michigan’s electrical demand in 2025. That’s the year in which Fermi 3 was supposed to come on line, according to DTE’s initial license application.

We are now 8 years past the publication date of the MPSC study. We can get an idea of how accurate their forecast has been. The most recent year for which actual data about electrical demand in Michigan is available from the U.S. Energy Information Administration is 2012. Information for 2013 should be available from them in the fall of 2014.

In 2012, actual electrical demand in Michigan was 104,107 GWh. According to the MPSC’s projection, it was supposed to be 131,746 GWh for that year. Reality was short of the projection by 27,639 GWh, or 26.50% below where the MPSC and DTE imagined it would be.

What in fact happened is, electrical demand in Michigan peaked in 2007 at 109,927 GWh. In the next two years, because of economic crisis and recession, it declined sharply, bottoming out at 98,121 GWh in 2009. In 2010, demand recovered a bit, to 103,649 GWh, and has remained essentially flat (plus or minus less than 1%) during the shaky economic “recovery” since then.

The number to which we should pay close attention is 27,639 GWh. That’s the difference, in 2012, between the MPSC/DTE expectations and actual demand. Remember that the generating capacity of Fermi 3 is planned to be around 11,000 GWh per year. The difference between Michigan’s actual demand for electricity and what MPSC/DTE imagined that need would be is already way more than twice Fermi 3’s potential generating capacity. Fermi 2, DTE’s only currently operating nuclear reactor, produces around 7,700 Mw-hrs of electricity per year. If Fermi 3 is never built and Fermi 2 is permanently closed, DTE can also close a couple of its dirtiest coal-fired generators and we’ll still be fine.

Even if demand were magically to resume a growth rate of 1.3% per year, actual demand would be short of imagined demand by significantly more than 27,639 GWh per year by 2025. We have no particular reason to believe that growth in electrical demand will resume at all. The obvious conclusion is that neither Fermi 3’s generating capacity nor Fermi 2’s is needed.

On top of that Governor Snyder’s energy task force report (published 2013) concluded the electrical grid can carry up to 30% of its power from renewable sources (wind, solar and hydro) without needing to be upgraded. The actual experience of Germany (and other nations in Europe that have mess sunlight available than Michigan) has shown that an upgraded electrical grid can carry 50% or more energy from renewable sources without becoming unsatble. And finally, the cost of upgrading Michigan’s electrical grid to this standard is far less than the $15 Billion projected cost of building Fermi 3.

Of course, the uranium fuel Fermi 3 would use is not mined in Michigan, so the money for fuel to run Fermi 3 would permantly drain out of the state. Fuel for wind and solar costs nothing, so long as the sun shines on Michigan. The cost of generating electricity in Michigan from wind and solar is purely the cost of building the turbines and solar panels, and maintaining them. Just for comparison, $15 Billion would purchase a little over $3,900 in solar panels for every household in Michigan. We are not talking about every household in the Detroit Edison service area. We are talking about every household in the entire state.

Not only is the Fermi reactors’ electrical output not needed; building Fermi 3 is clearly a poor way to spend $15 Billion. Fermi 3 is just a bad idea all around, even if Detroit Edison would, because of ratepayer subsidies and federal guaranteed loans, make a profit on building it.

And we haven’t yet mentioned the unknown cost of properly disposing of spent radioactive fuel, the danger of a reactor core meltdown, or other significant disadvantages of getting electricity from nuclear power rather than safe renewable sources. These costs and dangers apply to the current Fermi 2 reactor just as much as they do to the proposed Fermi 3.

Even if everything goes according to plan – no meltdown or other serious accident – nuclear reactors mean enormous cleanup costs in the future. California Edison recently estimated the cost of decommissioning their two reactors at San Onofre, California at $4 Billion. They still do not have a long-term solution for the spent fuel, so their $4 Billion plan anticipates only temporary dry cask storage of the spent fuel on the site. Real permanent disposal will cost more.

As a first-order estimate based on this, it’s going to cost some $2 Billion to decommission Fermi 2 in a comparable fashion. The actual cost might be more, because Fermi 2 has more spent fuel. If the license to operate Fermi 2 is extended, then the best-case decommissioning cost goes up, because more fuel will be used. Whatever the actual cost, we are stuck with it. It’s the price of avoiding a Fukushima-type disaster. Extending the license for 20 years also greatly increases the chances of a serious meltdown occurring at Fermi 2.

In summary, Michigan does not need electrical power from Fermi nuclear reactors. Dangers and decommissioning costs will continue to increase as long as Fermi 2 is operated. The only sensible course is to let Fermi 2’s operating license expire; to start decommissioning Fermi 2 at the earliest possible date; and to abandon plans for building Fermi 3. Nuclear power reactors are a mistake we do not need to keep repeating.

It’s certainly possible to get most of Michigan’s electrical power from clean and renewable sources. It makes economic and environmental sense. That’s the plan both business and government should be pursuing. We should not be subsidizing Detroit Edison’s 20th Century business plan in the 21st Century.

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